Home Money Donald Trump’s social media firm soars on its stock market debut in New York

Donald Trump’s social media firm soars on its stock market debut in New York

by Elijah
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Flying start: Trump Media & Technology Group, which is behind the Truth Social platform, rose nearly 60% to $79 on the Nasdaq in early trading

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Shares in Donald Trump’s social media businesses soared on their stock market debut in New York yesterday, valuing the former US president’s stake at almost £5 billion.

Trump Media & Technology Group, which is behind its Truth Social platform, rose nearly 60 percent to $79 on the Nasdaq in early trading.

That gave the company a value of more than £7 billion, making Trump’s 58 percent stake worth £4.9 billion.

The stock – which trades under the ‘ticker’ DJT, a nod to Trump’s initials – later closed up 16 percent at $57.99.

The rally will be a welcome boost for 77-year-old Trump as he faces massive legal bills while simultaneously running for president again.

Flying start: Trump Media & Technology Group, which is behind the Truth Social platform, rose nearly 60% to $79 on the Nasdaq in early trading

Flying start: Trump Media & Technology Group, which is behind the Truth Social platform, rose nearly 60% to $79 on the Nasdaq in early trading

However, lock-up restrictions could prevent him from selling or borrowing his shares for six months.

That means Trump is still a long way from a windfall, which will depend on how well stocks do in the coming months.

And analysts have warned that shares in Trump Media may already be overvalued as it has yet to make a profit.

“The company’s valuation is rich relative to its underlying fundamentals,” said Thomas Hayes, chairman of Great Hill Capital.

“This valuation may be more indicative of supporters’ enthusiasm for Trump than a reasonable estimate of the underlying business prospects.”

Trump Media’s Nasdaq debut came after it completed its merger with Digital World Acquisition, a so-called “spac,” or publicly traded shell company.

Truth Social has 8.9 million account holders, but only 5 million active users, compared to 550 million on X, which used to be Twitter.

Trump’s company generated just £2.6 million in revenue in the first nine months of last year and lost almost £40 million as it continues to burn cash.

AJ Bell investment analyst Dan Coatsworth said the share price rise was “completely out of step” with current activity.

Trump first launched Truth Social in February 2022 as a rival social network to what he called the “liberal media consortium.”

He said the social media app, which has a similar feed to X, would be a “fight back against Silicon Valley’s Big Tech companies.”

But its creation came as Trump escaped his ban on X, Facebook and Instagram following the Capitol Hill riot on January 6.

During his time in the White House, Trump used social media to announce policy decisions, fire aides and argue with critics, viewing it as a vital means of communication with his 88 million followers, many of them supporters.

In a statement this week, Trump Media CEO Devin Nunes, a former House Republican, said: “As a publicly traded company, we will passionately pursue our vision of building a movement to reclaim the Internet from the censorship of Big Tech.”

The company also plans to launch its own streaming service, which would be a ‘non-woke’ alternative to the likes of giant Netflix.

But its future depends heavily on Trump’s whims. The Florida-based company said in a regulatory filing that it is “heavily dependent on the popularity and presence of President Trump.”

It added that if the media personality were to limit or end his relationship with the company, including over his campaign to win back the presidency, the company would be “significantly disadvantaged.”

The company’s board also includes Trump’s closest allies, including his son.

This has led some experts to call the company a so-called meme stock — comparing it to GameStop and AMC, which skyrocketed during the pandemic thanks to a push from retail traders.

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